My long-term goals are to understand the cellular and molecular mechanisms regulating bone formation during skeletogenesis in the embryo and during repair of injured bone in the adult. The adult skeleton has a remarkable potential to heal by forming new bone that is indistinguishable from adjacent, uninjured tissues. Aspects of this adult regenerative process resemble skeletal development during fetal life. However, differences exist between the fetal developmental program and the adult regenerative process, such as the sources of skeletal stem cells. The origins of adult skeletal stem cells and their cellular and molecular contributions to skeletal tissue regeneration remain under appreciated. The goal of the work outlined in this proposal is to assess the extent to which skeletal stem cells residing in the periosteum (the tissue at the outer surface of bone) and endosteum (the tissue at the inner surface of bone) contribute differently to intramembranous and endochondral ossification during bone repair. Aim 1 will compare the mechanisms of bone healing in the periosteum and endosteum, by analyzing the distinct cellular and molecular responses after creating periosteal or endosteal injuries. Aim 2 will develop a new lineage analysis approach in order to determine the cellular contribution of the periosteum and endosteum during healing via intramembranous and endochondral ossification. This approach will be based on bone grafting experiments, which will allow me to distinguish periosteal- and endosteal-derived cells during healing. Aim 3 will assess the extent to which the healing responses of the periosteum and endosteum are intrinsic to each tissue or whether the microenvironment influences cell differentiation. To do so, bone grafts containing periosteal or endosteal stem cells will be ectopically transplanted and the contribution of these stem cells to bone healing will be analyzed. These experiments will be essential to develop new approaches to elucidate the role of osteogenic and chondrogenic factors on different stem cell populations within the bone. This research will have a direct impact on tissue engineering, which aims to use combinations of stem cells with osteoinductive and osteoconductive materials to improve the treatment of delayed fracture healing and bone diseases.